9911796707
TMI Blog2021 (5) TMI 1088X X X X Extracts X X X X X X X X Extracts X X X X ..... NAL HIGHWAYS AUTHORITY OF INDIA VERSUS K. PERIYASAMY AND ORS. [ 2018 (4) TMI 2000 - MADRAS HIGH COURT] would not assist the case of the appellant. The question now arises for consideration of this Court is, as to what is the effect of amendment of Bye-law 252(2) amended by the Stock Exchange, Mumbai providing that the provision of Limitation Act, 1963 would be applicable. Allahabad High Court in case of Mt. Begam Sultan [ 1925 (7) TMI 4 - ALLAHABAD HIGH COURT ] relied upon by the learned counsel for the respondent held that the law of limitation applicable to a suit or the proceeding is the law in force at the date of the institution of the suit or the proceeding unless there is a distinct provision to the contrary. It is held that there was no vested right in the decree holder to wait for an indefinite period of time in order to apply for execution. Supreme Court in case of Ramprasad Dagaduram [ 1966 (4) TMI 82 - SUPREME COURT ] has held that the respondent had no vested right in the law of procedure for enforcement of mortgage though the period of limitation was abridged for the enforcement of the mortgage by Article 132 of the Indian Limitation Act, 1908. Such abridgment did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that the period of limitation for lodging the claim under the old as well as the new Act was same six months which expired three weeks after coming in force of the new Act. It would be open to the appellant to file his claim within this period or even later by 22nd July, 1989 with a prayer to condone the delay. His rights to claim for compensation was not affected at all with substitution of one Act with another. Since, the period of limitation remained the same, there was no question of the appellant being taken by surprise. In this background, the appellant s further default has to be considered. It is held that having actually initiated the proceedings when the old Act covered the field the claimant could say that his right which had accrued on the date of filing of the petition could not be taken away. A perusal of Section 30 of the Limitation Act, 1963 makes it clear that any suit for which the period of limitation is shorter than the period of limitation prescribed by the Indian Limitation Act, 1908, may be instituted within a period of seven years next after the commencement of the said Act, 1963 or within the period prescribed for such suit by the Indian Limitation Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tration and Conciliation Act, 1996 (for short 'Arbitration Act'), the appellant has impugned the judgment dated 2nd May, 2005 passed by the learned Single Judge dismissing the arbitration petition filed by the appellant under section 34 of the Arbitration and Conciliation Act, 1996. Some of the relevant facts for the purpose of deciding this appeal are as under:- 2. The appellant was the original petitioner/claimant before the learned Single Judge and also before the arbitral tribunal. The respondent herein was the original respondent before the learned Single Judge as well as in the arbitral proceedings. It was the case of the appellant that the appellant is an investor whereas the respondent is a corporate member of the Bombay Stock Exchange Limited and is carrying on business as share, stock and finance broker. 3. On 3rd August, 1994, the appellant purchased 1000 shares of Prakash Tubes Ltd. through the respondent. On 27th August, 1994, 200 shares of the said company were returned to the respondent as the same were returned by the said company Prakash Tubes Ltd. on the ground that the signature differed. On 12th August, 1995, 100 shares were returned by the respondent after re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Stock Exchange were amended. The provisions with respect to the limitation were added by amending the bye law no.252. The amendment were two fold i.e. claim against defaulter members and the claim between the members and non-members. 7. It is the case of the respondent that as far as the claim against the defaulters are concerned, the bye-law prescribed a period of six months from the date the claim arises or becomes due. However, the arbitral tribunal was granted sufficient power to condone delay as provided under section 5 of the Limitation Act. Bye-law 252(2) of the amended bye-law provided that the provisions of the Limitation Act, 1963 were applicable. 8. On 7th June, 2002, the Governing Board of the Bombay Stock Exchange passed a resolution and once again amended the bye-law 252(2) by the said amendment. It was provided that the claim has to be received by the exchange within a period of six months from the date of transaction. The said amendment empowers the Governing Board to appoint the committee to settle all claims and differences amicably. It was provided that the time taken by the Investor's Grievances Redressal Committee (IGRC) would be excluded while computing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant preferred this appeal under section 37 of the Arbitration Act against the said judgment dated 2nd May, 2005. 12. Mr.Kunal Kumbhat, learned counsel for the appellant invited our attention to various documents annexed to the appeal paper-book and submits that the disputes between the parties arose during the period between 1994-1995 which was referred to the arbitration. The last transaction between the parties took place on 6th December, 1995. The respondent had forwarded reconciliation statement to the appellant on 29th May, 1996. The appellant reconciled the statement of account and forwarded their reconciliation statement to the respondent on 25th June, 1996. The appellant had called upon the respondent to return 175 shares of Surya Roshni Ltd., 50 shares of Brook Bond Ltd., 100 shares of Torrent Gujarat Bio Tech Ltd., 100 shares of Atlantic Spinning and demanded payment of Rs. 3,100/- as difference in settlement nos. 5527 and 7453. 13. It is submitted that during the period between 1996 to 1998, the appellant had exchanged about 12 correspondences with the respondent and had repeatedly requested for return of those shares and the amount. All those correspondences were pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. The said finding rendered by the learned Single Judge has not been challenged by the respondent. He submits that though on the date of the transaction between the parties, the period of limitation was not applicable, in view of section 2(4) of the Arbitration Act, the learned arbitrator applied the amended bye-laws 252 of the Bombay Stock Exchange from the date of enactment of the said bye-laws to the transaction between the parties and held the claims made by the petitioner as barred by law of limitation. 17. It is submitted that the learned arbitrator was bound to decide the dispute on the basis of the arbitration agreement between the parties and the provisions of law applicable on the date of transaction and not subsequent amendment to the bye-laws of the Bombay Stock Exchange. The rejection of the substantial claims of the appellant by means of a post facto amendment of bye-laws and by applying it to all past disputes in the absence of any such specific provision in the bye- laws and in the absence of any authority which is entrusted with the framing of such delegated legislation would clearly be against the clear legislative intent of section 2(4) of the Arbitration and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tribunal has applied the amended bye-law 252 of the Bombay Stock Exchange from the date of enactment of the said bye-law which never formed part of the rules, regulations and bye-laws by which the transaction in question were governed. It was beyond the authority of the arbitral tribunal to apply the provisions of bye-laws 252 to the past transactions which were governed by section 2(4) of the Arbitration Act which expressly excluded the provisions of the Limitation Act to the statutory arbitrations. He submits that the rules, regulations and bye-laws of the Bombay Stock Exchange clearly provided that a broker, shares a fiduciary relation with his client and carries out all the transactions as an agent. Since the shares in respect of which the arbitration shall be instituted still lie in trust of the respondent, the question of limitation did not arise. 22. It is submitted that the learned Single Judge failed to appreciate and came to the conclusion erroneously that since there was a debit entry in the statement of account of the appellant, the shares could not have been in the custody of the respondents. He submits that though there were debit entries in the statement of account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abilities by the respondent as the respondent had neither at any point of time denied that the appellant had purchased the shares for which the appellant was seeking delivery nor the respondent had stated that they had delivered those shares. The findings of the learned Single Judge that the debit entry is a conclusive proof of delivery of the shares is completely fallacious and unacceptable. The transaction in the year 1994-95 took place physically and not online. 27. It is submitted by the learned counsel that the period taken before IGRC i.e. between 29th April, 1999 and 29th September, 2000 is required to be excluded. He submits that even if the provisions of the Limitation Act, 1963 were made applicable, the period of three years would commence only after 29th September, 2000 when the IGRC directed the parties to refer their disputes to arbitration. The statement of claim was already filed by the appellant on 26th October, 2002. The claim thus filed by the claimant was within the period of limitation. 28. Mr. Purohit, learned counsel for the respondent on the other hand submits that it is not the case of the respondent that the said amendment brought to the bye-law of the Bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the learned counsel placed reliance on the judgment of Supreme Court in case of Ramprasad Dagaduram vs. Vijaykumar Motilal Hirakhanwala & Ors., AIR 1967 SC 278 and in particular paragraphs 11 and 13. He also placed reliance on the judgment of Allahabad High Court in case of The Allahabad Bank Ltd. vs. Rane Sheo Ambar Singh & Ors., AIR 1976 Allahabad 447 and in particular paragraphs 11 to 13 of the said judgment. 32. It is submitted by the learned counsel that since in this case by virtue of the amendment to bye-law 252 of the Bombay Stock Exchange, the unlimited period of limitation applicable to the transaction in view of section 2(4) of the Arbitration Act was curtailed by providing the prescribed period of limitation under the provisions of Limitation Act, 1963, the limitation would commence from the date when the said amendment to bye-law 252 of the bye-law of the Bombay Stock Exchange was made. He submits that three years period of limitation thus would have commenced from 29th August, 1998. Even if the time period taken before the IGRC to hear the complaint made by the appellant is excluded, the claim made by the appellant before the arbitral tribunal would be still time b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... others vs. Tribhuwan and others, AIR 1921 Bom 40 and in particular relevant paragraph on pages 40 and 41. Learned counsel distinguished the judgment of this Court in case of R.C. Goenka (supra) on the ground that the petitioner in that matter had availed of the remedy before the amendment of the bye-law of the Bombay Stock Exchange and had withdrawn the said proceedings before amendment. The issue before the learned Single Judge in the said matter was whether the issue of limitation is a procedural law or not? The parties had obtained liberty to file claim after the amendment to bye-law 252 of the bye-law of the Bombay Stock Exchange to file claim in the line with the bye-law of the Bombay Stock Exchange. 37. Learned counsel for the respondent distinguished the judgment of this Court in case of Marwadi Shares & Finance Ltd. (supra) on the ground that this court in the said judgment had considered the rights of the parties to file an appeal as substantive right which is not the case in this matter. In that matter, the original proceedings were already filed prior to the date of amendment to the bye-law of the Stock Exchange. 38. It is submitted by the learned counsel that even in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... virtue of section 2(4) of the Arbitration Act. The period of limitation prescribed for the first time in the year 1998 was admittedly not applicable with retrospective effect. Such period of limitation introduced for the first time in the year 1998 could not apply to the cause of action having arisen prior to the date of such amendment. 43. Learned counsel for the appellant distinguished the judgment of Supreme Court in case of Vinod Gurudas Raikar (supra) on the ground that the period of limitation under the unamended Limitation Act and amended Limitation Act were the same. He relied upon section 6(c) of the General Clauses Act, 1897. Learned counsel distinguished the judgment of this Court in case of Gopaldas Ganpatdas and others (supra) on the ground that in the said judgment this Court had considered the retrospective effect of section 48 of the Code of Civil Procedure, 1882 in regard to the decree passed prior to the date of coming into force of the new Code. The said judgment does not state that on the amendment of the provisions relating to the period of limitation, the said provision would apply with retrospective effect. Learned counsel for the appellant distinguished the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Bye-laws inserted on 29th August, 1998 applies to the transactions in question with effect from the date of such amendment, whether the appellant had filed arbitral proceedings within the period of three years from the date of such amendment ? 47. We shall now deal with the aforesaid questions fell for consideration of this Court. The undisputed facts are as under :- The last transaction between the appellant and the respondent was on 6th December, 1995. The respondent had sent a letter to the appellant on 29th May, 1996 for reconciliation of the statement of accounts. On 25th June, 1996, the appellant had forwarded its reconciliation statement to the respondent. According to the statement of accounts submitted by the respondent to the appellant, the respondent were entitled to recover the sum of Rs. 18,379/- from the appellant. 48. It was the case of the appellant that during the period between 17th September, 1996 and 18th October, 1998, there was exchange of correspondence between the parties. On 29th August, 1998 Bye-law 252(2) was amended providing that the provisions of Limitation Act, 1963 would be applicable. The appellant made a complaint to the Investment Grievance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be filed at any time in future. 52. It is held by the arbitral tribunal that if the argument of the appellant would be accepted, it would lead to absurdity. Any claim prior to the date of amendment will not become time barred at any time and the appellant can file claim by filing application on any day while all claims claimed after the date of amendment would become time barred on the expiry of three years from the date of amendment. The arbitral tribunal held that time cannot be unlimited for the appellant as transaction was prior to the amendment of Bye-laws of the Stock Exchange making Limitation Act applicable to the transaction under Rules, Regulations and Bye-laws. The arbitral tribunal accordingly held that the claims made by the appellant on 26th October, 2002 were time barred. The appellant ought to have filed their claim on or before 28th August, 2001. 53. The arbitral tribunal corrected the said award by a rectification order dated 21st July, 2003. In the award at various places the date of 13th June, 2003 mentioned was corrected as 26th October, 2002. Similarly, the date of filing of statement of claim mentioned as 12th January, 2003 was corrected to 26th October, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Court in case of Ashalata Lahoti (supra) held that the Bye-laws framed under Section 9 of the Securities Contracts Act are statutory in nature and in view of Sections 46 and 37 of the Arbitration Act are not covered by Limitation Act. It is held that insofar as the dispute between a member and a member is concerned, Bye-laws had been framed whereby limitation to refer a dispute is three months. It is however, no answer to contend that the principle of laches should be read into the Act. Once the parties sign an Agreement to refer a dispute to arbitration and make no provisions for raising disputes within a specific period, the question of reading limitation into it will not arise. It is for the Exchanges to consider amending the Bye-laws in manner like dispute between members and members and providing for a suitable period of limitation. It is not in dispute that in the year 1998 Bye-laws 252(2) was amended so as to provide the period of limitation to the arbitration under the Stock Exchange Bye-laws. 57. A learned Single Judge of this Court in case of R.C. Goenka (supra) while dealing with a petition under Section 34 of the Arbitration and Conciliation Act, 1996 impugning the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellate Bench on the ground that SEBI circular and subsequent amendments by Bombay Stock Exchange, the Bye-laws and Regulations had taken away the powers of the Appellate Bench to condone delay. In that context, the learned Single Judge of this Court (one of us R. D. Dhanuka, J.) held that right of appeal is a vested right which can be taken away only by a subsequent enactment if it so provides expressly or by necessary indenment and not otherwise. 60. This Court held that the right of appeal is not a mere matter of procedure but is a substantive right which is a vested right and such a right to enter the superior Court accrues to the litigant and exists as on and from the date the original cause of action commences and although it may be actually exercised when adverse judgment is pronounced. Such a right has to be governed by the law prevailing on the date of original cause of action and not as per the bye-law that prevails at the time of its decision or at the date of filing of an appeal. The petitioner had already filed proceedings before the learned Arbitrator. The vested right of filing an appeal against the impugned award, if any and the right to file an application for cond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bai applied with retrospective effect, the judgment of Madras High Court in case of The Project Director, National Highways Authority of India (supra) would not assist the case of the appellant. The question now arises for consideration of this Court is, as to what is the effect of amendment of Bye-law 252(2) amended by the Stock Exchange, Mumbai providing that the provision of Limitation Act, 1963 would be applicable. 64. Allahabad High Court in case of Mt. Begam Sultan (supra) relied upon by the learned counsel for the respondent held that the law of limitation applicable to a suit or the proceeding is the law in force at the date of the institution of the suit or the proceeding unless there is a distinct provision to the contrary. It is held that there was no vested right in the decree holder to wait for an indefinite period of time in order to apply for execution. Supreme Court in case of Ramprasad Dagaduram (supra) has held that the respondent had no vested right in the law of procedure for enforcement of mortgage though the period of limitation was abridged for the enforcement of the mortgage by Article 132 of the Indian Limitation Act, 1908. Such abridgment did not take awa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw 252(2) for filing any claim in respect of cause of action having arisen prior to the date of amendment. 68. The question now that arises for consideration is that if the provisions of Limitation Act, 1963 apply to the transactions in question, whether the proceedings were filed by the appellant within a period of three years from 29th August, 1998 or not ? 69. In this respect, it would be apposite to refer to a judgment of the Supreme Court in case of Vinod Gurudas Raikar (supra) relied upon by the learned counsel for the respondent. The Supreme Court in the said judgment had considered a Civil Appeal arising out of the order passed by the High Court dismissing the appeal arising out of the order passed by the Motor Accident Claim Tribunal. The Accident had taken place on 22nd January, 1989. The Motor Vehicle Act, 1988 came into force on 1st July, 1989. The period of limitation for filing a claim petition both under the old Act and the new Act was six months. The limitation period of six months expired on 22nd July, 1989 under the unamended provision. The claim petition was however filed on 15th March, 1990 with a prayer for condonation of delay. The Motor Accident Claim Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal after its constitution could be held to be either reasonable time for the delay of about two months can be condoned under proviso to Section 110-A(3). 72. The Supreme Court held that the period of limitation for lodging the claim under the old as well as the new Act was same six months which expired three weeks after coming in force of the new Act. It would be open to the appellant to file his claim within this period or even later by 22nd July, 1989 with a prayer to condone the delay. His rights to claim for compensation was not affected at all with substitution of one Act with another. Since, the period of limitation remained the same, there was no question of the appellant being taken by surprise. In this background, the appellant's further default has to be considered. It is held that having actually initiated the proceedings when the old Act covered the field the claimant could say that his right which had accrued on the date of filing of the petition could not be taken away. The present case is different. The right or privilege to claim benefit of a provision for condonation of delay can be governed by the law in force at the time of delay. In our view, the principle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .f. the date of such amendment. 76. Supreme Court in case of Syed Yousuf Yar Khan and Ors. v/s. Syed Mohammed Yar Khan and Ors., AIR 1967 SC 1318 considered a situation where the period of limitation prescribed for the suit by the corresponding law in Hyderabad was an unlimited period. Section 30 enabled the plaintiff to institute a suit within a period of two years after 1st April, 1951. The Part B States (Laws) Act, 1951 while extending the Indian Limitation Act, 1908 to Hyderabad allowed the plaintiff reasonable time to institute the suit for recovery of the property. The extension of the Indian Limitation Act, 1908 to Hyderabad and the consequential change in law prescribing a shorter period of limitation did not confiscate the existing cause of action and must be recorded as an alteration in the law of procedure for the enforcement of the cause of action. 77. It is held that the Court must therefore apply the normal rule that law of limitation applicable to the suit is the law in force at the date of the institution of the suit. The suit is therefore governed by the Indian Limitation Act, 1908. The plaintiffs not having instituted the suit within two years after 1st April, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot prevented from doing so. This Court also considered the judgment of the Supreme Court in the case of Punjab National Bank and Ors. v. Surendra Prasad Sinha 1993 Supp. (1) SCC 499 at page 503- 504 in which it was held that the rules of limitation are not meant to destroy the rights of parties. Section 3 of the Limitation Act only bars the remedy but does not destroy the right which the remedy relates to. There are good reasons for supporting the existence of defence of limitation. One is that long dormant claims have more of cruelty than justice in them; that a defendant might have lost the evidence to disprove a stale claim and that persons with good causes of action should pursue them with reasonable diligence. 81. If the arguments of the learned counsel for the appellant is accepted that even after insertion of period of limitation under Bye- law 252 (2) of the Bombay Stock Exchange w.e.f. 29th August 1998, the appellant would still file his claim after any number of years, the respondent who has defence of limitation will lose his right of defence. The evidence that he would rely upon in such defence of period of limitation may be rendered nugatory and may be destroyed due t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... due to shorter period of limitation prescribed under the Limitation Act, 1963, then the period prescribed under the Indian Limitation Act, 1908 in Section 30(a) of the said Limitation Act, 1963, safeguards are provided to such litigant. We are not inclined to accept the submission of the learned counsel for the appellant that by virtue of Section 2(4) read with Section 43 of the Arbitration and Conciliation Act, 1996, there would be no period of limitation even after amendment to Bye-Law 252(2) framed by the Stock Exchange, Mumbai. 86. There is no dispute in the proposition canvassed by the learned counsel for the appellant that till such time, the said Bye-law 252 (2) was inserted, in view of Section 2(4) of the Arbitration and Conciliation Act, 1996, no limitation was applicable to the statutory arbitrations and more particularly it were governed by Bye-laws, Rules and Regulations of Bombay Stock Exchange. There is no merit in the submission of the learned counsel for the appellant that there was continuous cause of action in view of the respondent having failed to pay the sale proceeds of the shares to the appellant or to deliver the shares lying in the trust with the responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the said amendment. 90. The arbitral Tribunal has rendered various findings of facts after considering the pleadings, documents and the Bye-laws, Rules and Regulations framed by the Stock Exchange, Mumbai. Learned Single Judge while deciding the petition under Section 34 of the Arbitration and Conciliation Act, 1996 rightly did not interfere with the findings of facts and did not re-appreciate the evidence. The appellant did not make out any case for interference with the award rendered by the learned Single Judge. Scope of Section 37 of the Arbitration and Conciliation Act, 1996 is very limited. The appellant cannot expand the scope of Section 37 of the Arbitration and Conciliation Act, 1996 by advancing various arguments which are not advanced before the learned Single Judge while arguing the application under Section 34 of the Arbitration and Conciliation Act, 1996. We do not find any infirmity in the impugned award rendered by the arbitral Tribunal and also in the impugned judgment rendered by the learned Single Judge. Appeal is devoid of merit. 91. We accordingly pass the following order:- (i) Appeal No. 989 of 2005 is dismissed. (ii) There shall be no order as to c ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
